Cannon & Assocs., LLC v. Hillcrest Healthcare, LLC
| Decision Date | 29 April 2019 |
| Docket Number | No. M2018-00929-COA-R3-CV,M2018-00929-COA-R3-CV |
| Parties | CANNON AND ASSOCIATES, LLC v. HILLCREST HEALTHCARE, LLC |
| Court | Tennessee Court of Appeals |
Appeal from the Chancery Court for Davidson County
Ellen H. Lyle, Chancellor
This case involves the enrollment of a foreign judgment in Tennessee. The trial court granted summary judgment in favor of the plaintiff, effectively enrolling the foreign judgment, rendered in Florida, pursuant to the Full Faith and Credit Clause of the United States Constitution and Tennessee's Uniform Foreign Judgment Enforcement Act. On appeal, the defendant argues that the granting of summary judgment was improper because the Florida court lacked personal jurisdiction over defendant. Because we conclude that genuine issues of material fact remain unresolved, the trial court's order granting summary judgment in favor of the plaintiff is vacated and remanded for further proceedings.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Vacated and Remanded
W.H. Stephenson, II, Nashville, Tennessee, for the appellant, Hillcrest Healthcare, LLC d/b/a Hillcrest Healthcare Center.
Philip L. Robertson and Brittany M. Bartkowiak, Franklin, Tennessee, for the appellee, Cannon and Associates, LLC d/b/a Polaris Group.
OPINIONHillcrest Healthcare, LLC ("Hillcrest" or "Appellant") is a healthcare facility that was organized in 1995 and is located in Ashland City, Tennessee. In 2010, Hillcrest entered into a management agreement with Beacon-Ashland City, LLC ("Beacon") wherein Beacon assumed all of the day-to-day responsibilities of running the facility. The agreement indicated that Beacon was an independent contractor of Hillcrest, and that Beacon would have "ultimate control and decision-making authority over the assets and operation of the facility during the [m]anagement [t]erm." At all times relevant to this appeal, J. David Hightower ("Mr. Hightower") has been the registered agent for service of process for Hillcrest with the Tennessee Secretary of State.1
On April 15, 2015, Beacon entered into a series of contracts for collection services2 with Cannon and Associates, LLC d/b/a/ Polaris Group ("Polaris" or "Appellee"), a company organized under the laws of Florida and located in Tampa, Florida. Although the contract between Beacon and Polaris indicated that Polaris's services would be "provided both onsite and offsite as needed[,]" the contract did not indicate whether Polaris's services would be rendered in Florida or if employees of Polaris would travel to Tennessee to assist Beacon. The contract did, however, provide that Beacon would bear the cost of any travel required by Polaris personnel. Moreover, this contract provided that the agreement of the parties "shall be governed by the laws of the State of Florida." Marcella Bryant was the Beacon administrator who signed the April 15, 2015 contract with Polaris. Then, on June 15, 2015, another nearly identical contract was entered into by Beacon and Polaris. This second contract contained largely the same provisions as the April contract, except that this contract inexplicably provided that it would be governed by the laws of the State of Arkansas. Further, this second contract between Beacon and Polaris was signed by a different Beacon administrator, Hughes Ash.
Shortly after Beacon entered into the two contracts for collection services with Polaris, Beacon's relationship with Hillcrest deteriorated. As such, Hillcrest terminated its management contract with Beacon in August of 2015.3
After the contract between Hillcrest and Beacon was terminated, Polaris filed suit against Hillcrest in the Thirteenth Judicial District for Hillsborough County, Florida ("the Florida court"). The complaint alleged that Hillcrest was responsible for the balance owing on the contract between Beacon and Polaris. An affidavit of service was filed with the Florida court on March 10, 2016, indicating that the complaint and summons had been served on Hillcrest on February 29, 2016, at its business address in Ashland City, Tennessee. The affidavit of service further indicated that the documents were left with "Jennifer Ambrosch, a person authorized to accept service."4 Hillcrest never responded to the complaint in the Florida court and, as such, a default judgment was entered against Hillcrest on or about June 17, 2017, in the amount of $17,953.15.
Following the Florida court's entry of the default judgment against Hillcrest, Polaris sought to have the judgment enrolled in Tennessee by filing a verified petition to enroll the Florida judgment on September 18, 2017, in the Chancery Court for Davidson County Tennessee ("the trial court"). An authenticated copy of the default judgment was attached to the verified petition. Hillcrest filed a response, asserting that the Florida judgment was not entitled to full faith and credit in Tennessee. In support, Hillcrest argued that it had never had any contact with the State of Florida and that the default judgment was rendered without proper service of process. Simply put, Hillcrest disputed that it was ever subject to personal jurisdiction in the Florida court.
On February 1, 2018, Polaris filed a motion for summary judgment to enroll the judgment. Therein, Polaris asserted that Hillcrest could provide no evidence to support a defense to the proposed enrollment of the Florida judgment and that Hillcrest's attacks on the foreign judgment were barred by the doctrine of res judicata. Polaris asserted that Hillcrest could not assert a personal jurisdiction defense because "lack of jurisdiction is a defense that must be raised in a responsive pleading or by motion[,] otherwise it is waived." Moreover, with regard to Hillcrest's argument that it never received service of process, Polaris argued that Hillcrest was properly served on February 29, 2016, when the complaint and summons was left with Jennifer Ambrosch at the Hillcrest facility. Moreover, Polaris included a sworn affidavit of its president and CEO, Charles Cave, wherein Mr. Cave asserted that Hillcrest and Polaris were parties to an agreement and that Polaris had served Hillcrest with a copy of the complaint and summons at the Hillcrest facility in Ashland City, Tennessee. Accordingly, Polaris asserted that the Florida judgment was entitled to full faith and credit as a matter of law, and that Hillcrest could not provide any evidence to the contrary. To that end, Polaris's statement of undisputed facts averred that "Hillcrest cannot bring forth the evidence to support any of its alleged affirmative defenses."
Hillcrest responded to this motion by again raising the issues of personal jurisdiction and insufficient service of process and disputing the assertion that Hillcrest lacked evidence to support its personal jurisdiction argument. Hillcrest attached to its response the sworn affidavit of Mr. Hightower, in which Mr. Hightower stated that he was the lawful agent for service of process for Hillcrest and that he was never served with the complaint and summons issued by the Florida court. Further, Mr. Hightower stated in his affidavit that Hillcrest never engaged in any business with Polaris or the State of Florida. With regard to the contract entered into by Beacon and Polaris, Mr. Hightower asserted that Hillcrest was not a party to this contract and that Beacon, at all relevant times, acted as an independent contractor rather than an agent of Hillcrest. Hillcrest also submitted a sworn affidavit from Marcella Bryant, the Beacon administrator whose signature appears on the April 2015 contract between Polaris and Beacon. Ms. Bryant stated that she entered into the agreement with Polaris not at the behest of Mr. Hightower or Hillcrest, but rather under the direction of other Beacon administrators. Ms. Bryant also stated that it was her understanding that neither Mr. Hightower nor any other officers of Hillcrest were ever apprised of the contracts between Beacon and Polaris. Accordingly, Hillcrest's proffered statements of undisputed material facts averred that Polaris could offer no proof that Hillcrest or Mr. Hightower ever engaged in contact with the State of Florida sufficient for Florida to exercise personal jurisdiction over Hillcrest. Hillcrest also disputed that Hillcrest was properly served with the original complaint and summons.
The trial court held a hearing on Polaris's motion for summary judgment on April 6, 2018. On April 20, 2018, the trial court entered an order in which it concluded that there were no genuine issues of material fact, and that the Florida judgment was entitled to full faith and credit in Tennessee. With regard to the issue of personal jurisdiction, the trial court concluded that the record, without dispute, established that Hillcrest was a party to the contract with Polaris, and further pointed out that the April 2015 contract between Beacon and Polaris was controlled by Florida law. As such, the trial court determined that there was "no issue of fact that the parties agreed to Florida jurisdiction."
From this order, Hillcrest appeals.
The single issue presented for review is whether the trial court erred in concluding that Polaris was entitled to summary judgment on its petition to enroll the Florida judgment in Tennessee.
This case was decided on a motion for summary judgment. Summary judgment is appropriate where: (1) there is no genuine issue with regard to the material facts relevantto the claim or defense contained in the motion; and (2) the moving party is entitled to judgment as a matter of law on the undisputed facts. Tenn. R. Civ. P. 56.04. "[W]hen the moving party does not bear the burden of proof at trial, the moving party may satisfy its burden of production either (1) by affirmatively negating an essential...
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